The interim government is planning to prepare a small budget with a 6 percent GDP growth target for the next fiscal year considering the sluggish economy and low revenue collection.

Officials said the finance ministry has already started working to this end after receiving directives from the chief adviser, with Finance Adviser Salehuddin Ahmed set to begin pre-budgetary meetings with different stakeholders from next week.

Ahmed will preside over the series of meetings, the first of which will be held on Sunday featuring various economists. Later, the finance ministry will call upon business leaders, economic reporters and related other individuals.

But as the country's parliament is absent, he may announce the proposed budget for fiscal year (FY) 2025-26 on air.

Ahmed said they will complete the pre-budget meetings by April.

Finance Adviser Salehuddin Ahmed is set to begin pre-budgetary meetings with different stakeholders from next week

"No ambitious goals will be set in the upcoming national budget, and the GDP growth target will be set lower," he told The Daily Star.

Officials of the finance ministry said they had a long discussion with the Chief Adviser Prof Muhammad Yunus last month, where they presented a draft plan for formulating the budget.

The chief adviser then issued directives for the draft plan and those are now being incorporated, according to a senior official of the finance ministry.

As per the current plan, the GDP growth target for FY26 will be set at 6 percent, which is lower than the 6.75 percent being targeted in this year's budget.

However, the GDP growth target could be lowered to 5.25 percent in the revised budget for FY25 considering the damage caused by multiple floods and the interim government's contractionary monetary policy aimed at containing inflation.

Besides, GDP growth in the ongoing fiscal year is low as there was political unrest and an unstable business environment. But the growth will likely be higher next year thanks to gradual improvements in the economic environment, the officials said.

Multilateral lenders like the World Bank, International Monetary Fund and Asian Development Bank have also forecasted lower growth for the current fiscal year and enlarged the growth for the next.

Meanwhile, the targeted inflation rate for FY26 may rise to 6.5 percent while it was around 8 percent in the budget for the ongoing year.

The previous government had fixed the inflation target at 6.5 percent in the original budget.

The size of the draft budget presented to the chief adviser last month was about Tk 8.48 lakh crore, including an allotment for Annual Development Programmes (ADP) worth Tk 2.7 lakh crore.

Finance ministry officials said the chief adviser directed them to cut the budget short even further, which may result in it reaching Tk 8 lakh crore while the ADP size may remains Tk 2.4 crore.

The current fiscal years' original budget was Tk 7.97 lakh but was later revised by the interim government at Tk 7.44 lakh crore.

"Though the budget size increases every year, the upcoming budget may be down from the previous year's original budget," the official said.

Adviser Ahmed did not name the number, but he did say the size would not be much more than the current fiscal's budget.

 "We will also prepare the ADP allocation pragmatically," he said.

The ADP allocation was Tk 2.65 lkah crore in the original budget, which was revised by Tk 2.16lakhn crore.